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Application of Neuroscience in Management

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DOI: 10.1007/978-3-319-62938-4_4

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Chapter 4
Application of Neuroscience in Management

Łukasz Sułkowski and Michał Chmielecki

Abstract Examination of the human mind is a subject of various disciplines that


belong to the natural or social sciences, or that straddle the line between them. The
most important include biology, psychology, neurology, neuroscience, psychiatry,
anthropology and sociology. The interest in exploring the potential links between
neuroscience and management as a social science as well as organization studies is
constantly growing. This brings a fair amount of attention to mental processes and
their role in explaining human behavior and effectiveness. The aim of this chapter is
to analyze the application of neuroscience in management.

Keywords Neuroscience • Management • Neoevolutionism • Neopositivism •


Management paradigms • Neuroleadership

4.1 Neurosciences

Most people believe that neuroscience is just about developing a map of the brain
and identifying what each part does. If it were that simple, there wouldn’t be any
need for management scholars and practitioners to take notice. Why should it
matter—at least for management—where it gets done provided it is clear what
the brain does? The reality however, is that neuroscience has started to make clear
the principles of brain organization and functioning, which in turn are fundamen-
tally changing what we think the brain is trying to achieve. Another wrong notion is
that neuroscience focuses only on the more basic processes of perception, inspira-
tion and deeds shared by living beings, at the cost of higher functions found only in
humans. As we shall see, neuroscience today is exploring the most subtle aspects of
human social perception and cognition.
According to Ochsner and Lieberman (2001), neuroscience is as much a biolog-
ical science and a social science (Table 4.1).

Ł. Sułkowski (*) • M. Chmielecki


University of Social Sciences, Sienkiewicza 9 Street, Lodz 90-113, Poland
e-mail: lsulkowski@san.edu.pl

© Springer International Publishing AG 2017 49


K. Nermend, M. Łatuszyńska (eds.), Neuroeconomic and Behavioral Aspects
of Decision Making, Springer Proceedings in Business and Economics,
DOI 10.1007/978-3-319-62938-4_4
50

Table 4.1 Disciplines of neuroscience (own study)


Neurosciences
Neurology Neurobiology Neurochemistry Neurophysiology Neuropsychology Neuropsychoterapy Cognitive neuroscience
Ł. Sułkowski and M. Chmielecki
4 Application of Neuroscience in Management 51

4.1.1 Neurology

Neurology is the part of human medicine that deals with the study of nervous
system disorders. This means dealing specifically with the diagnosis, therapy and
prevention of sickness in the nervous system including peripheral, central and
vegetative nervous system disorders.

4.1.2 Neurobiology

Neurobiology is the study of the structure, function and development of nerve cells
and the nervous system. The term neurobiology can be used interchangeably with
neuroscience. However, Neurobiology specifically is the study of the brain and its
biological functions while Neuroscience is the broader science of the entire nervous
system.

4.1.3 Neurochemistry

This is the study of the chemical processes at a cellular level in the nervous system.
The primary focus of Neurochemistry is on the chemical transmitters in the
synapses and how the receptors function as well as the function of the hormone
system.

4.1.4 Neurophysiology

Neurophysiology, a subdiscipline of physiology, is the study of our nervous sys-


tem’s performance and reaction to external stimuli. The dynamic processes
between nerve cells and how they process information is the main focus of
Neurophysiology.

4.1.5 Neuropsychology

Neuropsychology refers to the study of the border between psychology and the
neurosciences. Here, with neuroscientific technologies, neuropsychologists study
human behavior. For instance, a decision-making task will also be analyzed using
brain scanning to identify which areas are activated in making specific choices. The
52 Ł. Sułkowski and M. Chmielecki

objective is to connect behavior to diverse regions of the brain and their specific
processes and functions.

4.1.6 Neuropsychotherapy

Neuropsychotherapy leverages insights from neuroscientists to treat psychological


disorders. This is based on the understanding that the brain forms its world view
through structural communication in the brain and that personality dysfunction can
also be represented by dysfunctions in the brain biology. Also, the brain’s biology
shows that the brain is plastic and so new pathways and behaviors can be shaped
and reshaped. Additionally, neuropsychotherapy seeks to comprehend the brain’s
chemical processes and how they are manifested in different cognitive processes
and are also linked biologically through the brain’s ability to build respective
receptors to these chemicals.

4.1.7 Cognitive Neuroscience

Cognitive neuroscience deals with the study of biological processes that bring about
cognition specifically focusing on the neural connections involved in mental pro-
cesses such as reward, attention, memory and fear.
To sum up. Neuroscience can be defined as the study of how the nervous system
and the brain functions. Neuroscience can provide many interesting answers in the
field of management.

4.2 Neurosciences, Neoevolutionsim Paradigm


and Management

The neoevolutionary paradigm in the area of social sciences is in the initial stage of
development. The use of neoevolutionism in research on individuals, cultures and
societies involves a radical change of perspective in the social sciences and leads to
man being dethroned by science once again (Buss 2008). “The history of science
indicates that humanity must have gradually rid itself of the conviction of its central
role in the universe. The milestones of the emancipation of thought were: the
Copernican Revolution, Darwinism and quantum mechanics. Copernicus put an
end to the theory that the Earth was the center of the universe. Darwin and his
successors destroyed the image of man as the crown of all living creatures.
Twentieth century physicists described a fundament of reality that proved unimag-
inable for man and was based on a coincidence. The time has thus come for another
4 Application of Neuroscience in Management 53

scientific revolution. Neoevolutionism forces its way into the social sciences and
leads the challenge to the traditional vision of the subjectivity of man in favor of a
hybrid called ‘the gene vehicle’ (Dawkins 1976)” (Sułkowski 2012a).
Pinker (2004) believes that, neoevolutionism is characterized by assumptions
that are contrary to the standard model of the social sciences. In objectivism, which
is the main postulate of both neopositivism and neoevolutionism, the social world is
recognisable through science. In epistemological monism, the mental world can be
described by means of such categories of the physical world as information and
calculations with the use of methods from the natural sciences (Dawkins 1976).
Verificationism and falsificationism involve practicing science through seeking to
confirm or reject scientific theories (falsificationism by C. Popper) (Popper 1934).
Epistemological universalism (anti-relativism) is a belief in the possibility of
reaching general and unquestionable rules of science based on the correspondence
theory of truth. In cultural universalism, surface cultural diversification hides deep,
universal mental mechanisms that constitute “human nature” (Pinker 2004). In
comparison, according to evolutionary cognitivism, human cognitive skills find
their place in the brain, whose development results from the coupling of genes and
the environment, and were created in the process of biological evolution
(Sułkowski 2012a, b) (Table 4.2).
Neoevolutionism itself has certain characteristics of a paradigm, mainly because
it proposes a coherent epistemology and methodology based on a theory that is
highly verified and is used in many disciplines of science. Nevertheless, in biology,
the neoevolutionary theory is a dominant and verified concept which is based on a
great number of scientific proofs; whereas in the social sciences neoevolutionism is
one of many concepts for research on the human mind, culture and society,
alongside functionalism, critical theory or interpretivism (Sułkowski 2012b).
Bradie believes that neoevolutionism in the social sciences realizes two separate
epistemological programs (Bradie 2004). The first one examines the evolution of
human cognitive mechanisms, and the second one—the evolution of scientific
theories. The evolution of cognitive mechanisms is an issue largely under empirical
research that analyzes the functioning of the brain. The evolution of scientific
theories is an epistemological and philosophical issue in which the theory of
evolution is a source of analogies and metaphors rather than cause-effect explana-
tions (Sułkowski 2012a, b).
Although there are many aspects of neuroscience, social cognitive neuroscience
specifically may have the most applicability to studying leadership. Social cogni-
tive neuroscience as defined by Ochsner and Lieberman (2001), is a developing,
interdisciplinary field that seeks to understand the interactions of humans at the
intersection of cognitive, social and neural spheres of science.
Recent developments in this region present proof of how leaders are supported in
various aspects of cognition and behavior by the human brain. For example, a
proposal on using neural basis are shaped to construct social knowledge, particu-
larly the approach to social inferences about thoughts, intentions and feelings of
others, was presented by Adolphs (2009).
54 Ł. Sułkowski and M. Chmielecki

Table 4.2 The standard model of the social sciences versus neoevolutionism (Sułkowski 2012a, b)
The standard model of the social
Criterion sciences Neoevolutionism
The nature of reality Dualism Monism
and cognition
Characteristics of Subjectivism and inter- Objectivism
cognition subjectivism
Epistemological Interpretivism or constructivism Verificationism or falsificationism
assumptions
Influence of the con- Cultural or cognitive relativism Epistemological and cultural
text of cognition and universalism
culture
Subject’s cognition of Essentialism Evolutionary cognitivism
reality
Research methodology Understanding, hermeneutics, Cause-effect explanation, experi-
phenomenology (search for mental method (search for
meaning) explanation)

David Rock (2008) labeled “NeuroLeadership” as the point where management


and/or leadership with neuroscience intersects. According to Ringleb and Rock
(2008), NeuroLeadership focuses on the application of neuroscience in manage-
ment training, leadership development, education, change management, consulting
and coaching. NeuroLeadership being an emerging field, we expect to have a better
understanding of the science behind neuroscience and then use that knowledge to
improve leadership practices, change management efforts, and positively affect
creativity and innovation, as well as engage employees, stated
Schaufenbuel (2014).
Lieberman et al. (2007) reported that brain study, specifically within the area of
cognitive, social and emotional neuroscience is beginning to give some fundamen-
tal brain insights that we can apply in the real world. He went on to state that the
biological foundations of the way humans interact are explored by social neurosci-
ence and covers various topics that have a different degree to which they can be
practicable and explicitly tested. These topics include: mind theory, self theory,
emotional regulation, mindfulness, stereotyping, attitudes, social pain, empathy,
status, fairness, connectedness, collaboration, morality, persuasion, compassion,
trust, deception and goal pursuit. Most of these topics and issues are applicable to
workplaces and leading the people within those workplaces.
Schaufenbuel’s whitepaper gives us some application of neuroscience to three
such areas, providing some initial information. They include: Leadership, Change
management and Innovation.
1. Leadership: Neuroscience findings such as trust and relationship building can
easily be applied by Human Resource professionals to their leadership develop-
ment activities. The conjecture is that great leaders open pathways in the brains
of their employees that support engagement and positive working relationships.
4 Application of Neuroscience in Management 55

Schaufenbuel states further that findings of neuroscience are very helpful in


connecting the dots between human interaction and effective leadership prac-
tices. As we continue to map the human brain, we expect to find out more about
the way the brain functions and how leaders can best apply this knowledge in
leading people and organizations.
2. Change management: At the very least, neuroscience corroborates what has
been known to industrial psychologists and managers for decades: People are
afraid of change! Change is usually perceived as a threat since the brain is
hardwired for survival. The thought is that our brains are looking out for threats
subconsciously, five times in a second. Some people may be wondering how this
is relevant to today’s organizations. It matters because workplaces are filled with
uncertainty. Think about the great rise in mergers and acquisitions, loss of jobs,
etc., these caused a lot of stress and fear, brought about by uncertainty. A deep
understanding of the fear of change and of the unknown has huge implications
for leaders, managers, and other change agents as they bring about change.
Schaufenbuel noted that by focusing on the positive aspects of the proposed
change, asking direct questions and listening actively to people’s concerns,
leaders and change agents can help reduce stress and nervousness for those
that will be affected by the change. Applying this strategy can improve the
ability of the brain to adjust how it’ll respond to the change and see it as
nonthreatening. As a leader, you must understand that the feeling of threat is
contagious. Seeing colleagues or leaders around us feeling worried and scared
will further spread the fear. Uncertainty negatively affects the memory, ability to
concentrate, job satisfaction, etc.
3. Innovation: Schaufenbuel and her associates also reported that neuroscientists
have discovered two capabilities of the human brain attached to innovation and
creative thinking. First and foremost, is the default network. This network is
capable of transcending or envisioning what it looks like to be in a different
place or time. Second, is the control network in the area of the brain that keeps
people on task. By making use of this strategy, leaders can connect with the
default network to egg on innovation and the control network to encourage
focus. According to this logic, it is advisable that organizations set up programs
like those at Google which gives employees protected time to work on any
inspired project of their choice that in some way moves the organization
forward. Also, companies may wish to create time blocks when staff put away
any form of distraction including cell phones to enable them focus on specific
assignments instead of multitasking.
The greatest amount of insight into how neuroscience can be applied to people in
the workplace, especially leadership and related issues has been provided by David
Rock and Schwartz (2006). According to Rock (2012), Gordon and Lieberman &
Eisenberger, have identified two promising themes from social neuroscience. The
first is that most of the motivation that drives our social behavior is ruled by an
overarching organizing principle of reducing threat and making the most of reward
(Gordon et al. 2008). Secondly, more than a few areas of social experience relies on
56 Ł. Sułkowski and M. Chmielecki

the same brain networks used for survival needs to maximize reward and reduce
threat—Taylor et al. (2008). Another way to put it is that the brain treats social
needs exactly the way it treats its need for food and water.

4.3 The Methodology of the Social Sciences

Methodology adequate for social sciences facilitates an understanding of the


functioning of objects at the highest level of complexity. Regardless of the cogni-
tive perspective, problems of the society, organization, culture or human psyche are
considered most difficult, as far as cognition is concerned. The systemic school
indicates the highest level of the organization, complexity and emergence of mental
and social and cultural processes (von Bertanlaffy and Sutherland 1976), while the
symbolic-interpretive paradigm, hermeneutics and phenomenology reject the pos-
sibility of reducing the world of ‘sense’ and ‘understanding’ to the level of the
natural sciences (Geertz 1973). Most postmodern scholars are skeptical of the
cognition of the mind and culture (Rorty 2009). Nevertheless, it seems that research
on the mind, culture and society is making progress, within many paradigms and
disciplines of science. It is therefore worthwhile to reflect on concrete research
problems and possible methods of their analysis (Sułkowski 2012a, b).
Examination of the human mind is a subject of various disciplines that belong to
the natural or social sciences, or that straddle the line between them. The most
important include biology, psychology, neurology, neuroscience, psychiatry,
anthropology and sociology. The human psyche can be analyzed on the basis of
(Alexander 1989):
• Functional, physiological and morphological examination of the brain.
• Clinical, psychological, psychiatric and neurological examination.
• Medical history and psychoanalytical examination.
• Research on AI, neural and cell networks (mathematical modeling).
• Palaeoanthropological research on hominids and anthropoids.
• Ethological, behavioral, sociobiological and primatological research, comparing
humans to other species (Lorenz 1950).
Society, organization and culture in general can be examined directly by means
of all research related to the human mind, but also in an indirect manner, by trying
to reach the level of the consciousness of society, culture or other group entities.
The research conducted primarily includes (Sułkowski 2012a, b):
• Qualitative research (ethnographic and biographic research, focus groups and
in-depth interviews, grounded theory) (Denzin and Lincoln 2005).
• Observation of social and cultural processes.
• Social experiments and quasi-experiments (Shaughnessy et al. 2009).
• Interrogative research with participants of social situations (surveys and opinion
polls) (Nowak 2007).
4 Application of Neuroscience in Management 57

• Statistical data analysis (Babbie 2008).


• Descriptive studies and analysis of historical data.
Scientists don’t just use scientific technologies as tools to explore areas of
interest; new equipments describe new scientific fields, and removes old limita-
tions—e.g., astronomy was shaped by the telescope and removed a lot of specula-
tions. We can also say the same of economics; its limitations have been continually
reshaped by tools such as econometric, mathematical and simulation methods
(Sułkowski 2009).
Also, the recent interest in neuroscience by psychologists is as a result of new
techniques. In this section, we review some of them:

4.3.1 Brain Imaging

Presently, brain imaging is the most popular tool for neuroscientists. This involves
comparing people performing “experimental” tasks and “control” tasks. The dif-
ference between images taken while the subject is performing the two tasks gives an
image of the areas of the brain that are set off by the experimental task.

4.3.2 Single-Neuron Measurement

Brain imaging techniques measure only the activity of circuits comprising thou-
sands of neurons. To measure single-neurons, small electrodes are inserted into the
brain with each of these electrodes measuring the firing of a single neuron. As
discussed below, there have been some major findings in the study of single-neuron
measurement believed to be relevant to economics. One constraint of this measure-
ment is that, it is mostly restricted to animals because inserting the wires harms
neurons.

4.3.3 Electrical Brain Stimulation (EBS)

Another technique that is largely restricted to animals is Electrical Brain Stimula-


tion. Psychologists James Olds and Peter Milner in 1954, found out that rats could
be trained to perform novel behaviors if rewarded by short pulses of EBS at certain
locations in the brain—Olds and Milner (1954).
58 Ł. Sułkowski and M. Chmielecki

4.3.4 Brain Damage in Humans and Psychopathology

Nearly all types of illness have been linked to specific areas of the brain. Develop-
mental disorders (e.g., autism), chronic mental illnesses (e.g., schizophrenia) and
degenerative nervous system diseases help in understanding how the brain func-
tions. Sometimes, the progression of a disease has a controlled pathway in the brain.
At first, Parkinson’s disease (PD) affects the basal ganglia and then extends to the
cortex. Therefore, the early symptoms of PD offer clues as regards the function of
the basal ganglia (Lieberman 2000).
Both neuroscience findings as well as methods will undoubtedly play an increas-
ingly prominent role in management. Indeed, a brand of neuroeconomics shaped by
neuroscientist is already emerging and attracting attention, whether management
scholars approve of it or not (e.g. Montague and Berns 2002; Kable and Glimcher
2002). Participating in the development of a shared intellectual enterprise will help
us ensure that the neuroscience helps answer management questions we care about.
Research on organization, society and culture belongs to various disciplines of
the social sciences, such as economics, cultural anthropology, sociology, linguistics
and cultural studies.
Neoevolutionism, which to some extent imitates neopositivism, using equally
strict cognitive criteria for the social sciences as for the natural sciences, constitutes
an ambitious cognitive attempt, while trying to avoid its mistakes. Therefore
neoevolutionists do not seek certainty of cognition, and are not enthusiasts of full
verificationism and focus on the development of empirical research, while rarely
dealing with problems of the philosophy of science (Table 4.3) (Sułkowski 2012a, b).

4.4 Neoevolutionary Methods in Management

Management is dominated by archaic social basic theories related to human nature,


the mind and society. For instance, one can quote excellent theories of motivation
developed by A. Maslow and F. Herzberg, which are nevertheless inadequate to the
modern level of knowledge in psychology and sociology (Maslow 1943; Herzberg
1959). A significant amount of research indicates the evolutionary origin of the
complexity of motivational mechanisms, which can be explained, for example, by
the modular structure of the mind (Tooby and Cosmides 2000; Gazzaniga 2000;
Fodor 1983) or by needs originating from the human environment (competition in a
social group) (Sułkowski 2012a, b).
Attempts to apply neurosciences in management studies have been very limited.
The use of neurosciences in describing human behaviors in the organizational
process is still scarce. From the point of view of management studies, the
neoevolutionary methodology is important mainly as a source of basic theory.
Models of human behavior related to exertion of power and leadership, creation
of social structures, the process of forecasting the future and planning, the creation
4 Application of Neuroscience in Management 59

Table 4.3 The levels of neoevolutionary epistemology (Sułkowski 2012a, b)


Level Content Relationships
Paradigm Scientific realism Basic level, philosophy of science and generalized
Objectivism theory applied to many disciplines of the natural
Reductionism and social sciences
Verificationism,
falsificationism
General theory of
evolution
Methodology Scientific method modeled Intermediate level of general rules for research
on the natural sciences within the paradigm
Neopositivist
Method Social experiments Operational level, proposals of cognitive and
Brain examination pragmatic methods
Standardized observation
Statistical methods

of culture, cooperation with other people and organization of work—all facilitate


the creation of effective management rules (Sułkowski 2012a, b).
It seems, however, that examining the process of organization and management
could also take the form of research programs using the neuroscience methodology.
Such research could formulate cognitive objectives in the form of identification of
biological conditions of organization, management, power and leadership,
organizational culture, the process of planning and strategizing, and many other
aspects of organization. In such programs, it would be possible to conduct inter-
disciplinary research based on methodological pluralism (Sułkowski 2012a, b)
(Table 4.4).
The methodology of neoevolutionism has proven its efficiency with valuable
research in evolutionary psychology and neuroscience. Research programs
conducted gather increasingly rich empirical material that makes it possible to
describe the human world being the subject of the social and humanistic sciences.
Research results lead to a new image of the human mind, society and culture, which
is largely inconsistent with traditional assumptions regarding human subjectivity
accepted by the social sciences (Sułkowski 2012a, b).
Therefore it seems that several postulates should be proposed in the methodo-
logical sphere, which derive from the rapid development of the neuroscience
methodology:
• In the various scientific disciplines related to man, culture and society, an analysis
should be made of the cognitive adequacy of the neuroscience methodology.
• Representatives of the social sciences, especially sociologists, economists, spe-
cialists in management, anthropologists and linguists, should start using the
methodology developed by the neurosciences.
• Research programs conducted by interdisciplinary teams and facilitating the
exploration of human behavior should be integrated.
60 Ł. Sułkowski and M. Chmielecki

Table 4.4 Suggestions for integrated research programs involving management studies using the
neoevolutionary methodology (Sułkowski 2012a, b)
Area of Sample research
management questions Hypotheses Research methodology
1 2 3 4
Organization To what extent is organi- Organization is a nat- Ethnological research,
zation genetically condi- ural feature of human comparative studies of
tioned? community primitive communities
What is the influence of Organization is based Literature and anthropo-
evolutionary variables on on cooperation and logical data on primitive
the process of organiza- competing for communities
tion? resources Social experiments
Does the process of Organization is man’s using brain examination
organization involve primary need Palaeoanthropological
genetic-environmental Organization is a excavations of primitive
coupling. If yes, what coupling of uncon- people, hominids and
does this involve? scious and conscious anthropoids
actions Comparative primato-
Power What are the sources of Power stems from logical studies (chim-
power in a social group? the animal pecking panzees)
Is power genetically order Quantitative compara-
conditioned? People have various tive intercultural studies
How flexible is the hier- levels of need for the in search of cultural
archy in a human exertion of power universals (survey
community? On average, women method with large rep-
have a lower need for resentative samples)
power Qualitative intercultural
Leadership To what extent does Leadership skills studies exploring cul-
leadership derive from derive from the tural diversity (in-depth
innate or acquired char- innate and acquired interviews, ethnometh-
acteristics? characteristics of a odology)
How does informal lead- leader and from the Qualitative comparative
ership form in a small social characteristics studies—studies of
group? of the group cases of organizational
Leaders in a small activities
group emerge from
among those individ-
uals showing Machi-
avellian intelligence
Organizational Does culture emerge The culture of a
culture spontaneously in an small group is inher-
informal group? ently xenophobic.
How can leaders form the Organizational cul-
culture of their groups? ture cannot be
managed
Planning and Among living creatures, Planning appears
strategy is man the only one who only in humans and
attempts to foresee the within a group of
future? people
Are planning skills Strategy is an
related to brain features advanced planning
(neuronal level)? skill
4 Application of Neuroscience in Management 61

• The neuroscience perspective should be included in training programs for


researchers in all scientific and humanist sciences.

4.5 Conclusions

The chapter concludes that neuroscience research methodology has already pro-
vided quite important insights regarding the management and especially, leader-
ship, innovation, change management and decision making.
A critical look at the application of the neoevolutionary paradigm in the man-
agement sciences initially shows its inadequacy on the subject of interest of
organizations and management. From the point of view of biological evolution,
economic entities, markets and sectors are not the units of research and scientific
scrutiny. However, a more profound analysis leads to the conclusion that the basis
of the functioning of all market components is human behavior, which can be
described from the evolutionary point of view. The management sciences should
accept challenges that stem from the development of the neoevolutionary paradigm,
and especially form neurosciences because all actions related to organization and
management are marked by biological evolution (Sułkowski 2012a, b).
Applying the neurosciences methodology to social sciences leads to creative
results. It allows for a verified theory describing human activities, appropriate for
use in a number of social sciences. Neuroscience is more and more effective in
explaining and foreseeing human behavior, often distancing itself from a purely
behaviorist vision of human nature.
Neoevolutionism and especially neurosciences is the subject of many contro-
versies, related mostly to its departure from the traditional vision of people and
society rooted in European culture. This reductionist approach undermines the
vision of human nature based on subjective and rational decision making. Its
explanations of behavior refer to deep motivations hidden in the human mind
(Sułkowski 2012a, b). However, there is much to be done, and more neuroscience
research will further influence management field.

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