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Measuring the Impact Factor of Agents within an Organization Using Communication Patterns

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  • Prat, Andrea
  • Palacios-Huerta, Ignacio

Abstract

Organizational economics predicts that communication patterns within an organization should reflect the relative value of their members to the organization. We propose to measure the impact factor of an agent by applying the Invariant Method?also known as Google?s PageRank algorithm?to electronic communication data. To explore the validity of this measure, we analyze email exchanges among the top executives of a large retail company. We construct their individual impact factors based only on email patterns and we compare them to standard economic measures of organizational importance. We find that: (i) The impact-factor ranking of executives mirrors perfectly their hierarchical ranking; (ii) Impact factor variability is significantly correlated with salary differences; (iii) Subsequent promotions (dismissals) affect executives with unusually high (low) impact factors. We conclude that simple communication-based impact factors may be a useful tool to measure the relative importance of agents in organizations.

Suggested Citation

  • Prat, Andrea & Palacios-Huerta, Ignacio, 2010. "Measuring the Impact Factor of Agents within an Organization Using Communication Patterns," CEPR Discussion Papers 8040, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8040
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    References listed on IDEAS

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    Cited by:

    1. Leighton Vaughan Williams & James Reade, 2014. "Prediction Markets, Twitter and Bigotgate," Economics Discussion Papers em-dp2014-09, Department of Economics, University of Reading.
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    3. Prat, Andrea & Garicano, Luis, 2011. "Organizational Economics with Cognitive Costs," CEPR Discussion Papers 8372, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Impact factor; Organizational economics; Pagerank;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General

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