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Team Governance: Empowerment of Hierarchical Control

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  • Friebel, Guido
  • Schnedler, Wendelin

Abstract

We investigate a team setting in which workers have different degrees of commitment to the outcome of their work. We show that if there are complementarities in production and if the team manager has some information about team members, interventions that the manager undertakes in order to assure certain efforts may have destructive effects: they can distort the way workers perceive their fellow workers and they may also lead to a reduction of effort by those workers that care most about output. Moreover, interventions may hinder the development of a cooperative organizational culture in which workers trust each other. Thus, our framework provides some first insights into the costs and benefits of interventions in teams. It identifies that team governance is driven by the importance of tasks that cannot be monitored. The more important these tasks, the more likely it is that teams are empowered.

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Bibliographic Info

Paper provided by Institut d'Économie Industrielle (IDEI), Toulouse in its series IDEI Working Papers with number 520.

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Date of creation: Sep 2007
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Handle: RePEc:ide:wpaper:9341

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Cited by:
  1. von Siemens, Ferdinand A., 2013. "Intention-based reciprocity and the hidden costs of control," Journal of Economic Behavior & Organization, Elsevier, vol. 92(C), pages 55-65.
  2. Schnedler, Wendelin & Vanberg, Christoph, 2014. "Playing 'Hard to Get': An Economic Rationale for Crowding Out of Intrinsically Motivated Behavior," Working Papers 0559, University of Heidelberg, Department of Economics.
  3. Grout, Paul & Schnedler, Wendelin, 2008. "Non-Profit Organizations in a Bureaucratic Environment," Sonderforschungsbereich 504 Publications 08-17, Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim.
  4. Galbiati, Roberto & Schlag, Karl H. & van der Weele, Joël J., 2013. "Sanctions that signal: An experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 34-51.
  5. Wendelin Schnedler, 2009. "You Don't Always Get What You Pay For: Bonuses, Perceived Income, and Effort," The Centre for Market and Public Organisation 09/226, Department of Economics, University of Bristol, UK.
  6. Schnedler, Wendelin & Vadovic, Radovan, 2007. "Legitimacy of Control," IZA Discussion Papers 3013, Institute for the Study of Labor (IZA).
  7. Jurjen J.A. Kamphorst & Otto H. Swank, 2010. "When Galatea cares about her Reputation: How having Faith in your Workers reduces their Motivation to shine," Tinbergen Institute Discussion Papers 10-123/1, Tinbergen Institute.
  8. Danilov, Anastasia & Sliwka, Dirk, 2013. "Can Contracts Signal Social Norms? Experimental Evidence," IZA Discussion Papers 7477, Institute for the Study of Labor (IZA).
  9. Herold, Florian, 2010. "Contractual incompleteness as a signal of trust," Games and Economic Behavior, Elsevier, vol. 68(1), pages 180-191, January.

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