Fostering Innovation through Empowered Workers - Experimental Evidence from the Bangladeshi Garment Industry

Informational constraints are often a crucial barrier to adoption of innovations in firms. How can firms overcome this barrier and increase upward flows of ideas? This paper, the first to examine this issue in the context of a manufacturing firm in a low-income country, assesses the impact on information flows from two man-agerial interventions that encouraged 1,600 line workers in a Bangladeshi garment factory to submit their ideas to improve operations and well-being at work. One in-tervention gave randomly selected workers time to discuss ideas with co-workers at free lunches; the other gave randomly selected supervisors communications training, and asked them to encourage their production line workers to develop ideas. I find that the lunch intervention fostered the upward flows of ideas, and led to improved worker well-being. By contrast, the supervisor-led meetings failed to accelerate the use of more efficient peer interactions; moreover, the presence of the supervisors undermined workers’ critical voice about their bosses. The evidence suggests that the effectiveness of the lunches was driven by changes in workers’ aspirations and the perceived ease of submission. By contrast, a perceived deterioration in the voice climate undercut the effectiveness of the supervision-led meetings. I also find that specific seating arrangements opposite experienced friends during lunches can be particularly beneficial for inexperienced workers.