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The Effects of Self-Managed and Closely-Managed Teams on Labor Productivity and Product Quality: An Empirical Analysis of a Cross Section of Establishments

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Author Info

  • Jed DeVaro

    (Cornell University)

Abstract

I estimate the effect of team production on labor productivity and product quality using a cross section of British establishments. A distinguishing feature of this study is its use of a structural model that treats as endogenous the organizations’ choices of teams and whether or not to grant autonomy to team members. One of the main findings is that the typical establishment enjoys statistically significant increases in labor productivity (but not product quality) from using teams, though there is no statistically significant difference between the predicted gains from autonomous versus non- autonomous teams. I show that standard methodological approaches that treat teams and autonomy as exogenous induce biases of two forms: 1) the benefits from teams are inflated, 2) the benefits of autonomous teams relative to those of non-autonomous teams are inflated. Both biases are particularly severe in the case of product quality.

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File URL: http://128.118.178.162/eps/lab/papers/0510/0510002.doc
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Bibliographic Info

Paper provided by EconWPA in its series Labor and Demography with number 0510002.

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Length: 57 pages
Date of creation: 05 Oct 2005
Date of revision:
Handle: RePEc:wpa:wuwpla:0510002

Note: Type of Document - doc; pages: 57
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Web page: http://128.118.178.162

Related research

Keywords: teams; autonomy; labor productivity; product quality;

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Cited by:
  1. Jed Devaro & Fidan Ana Kurtulus, 2011. "What types of organizations benefit from teams, and how do they benefit?," UMASS Amherst Economics Working Papers 2011-16, University of Massachusetts Amherst, Department of Economics.
  2. Anthony M. Marino & Ján Zábojník, 2008. "Work-related perks, agency problems, and optimal incentive contracts," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 565-585.
  3. Michael Beckmann & Dieter Kuhn, 2010. "Complementarities between Workplace Organisation and Human Resource Management:," Working papers 2010/03, Faculty of Business and Economics - University of Basel.
  4. Jones, Derek & Kato, Takao, 2007. "The Impact of Teams on Output, Quality and Downtime: An Empirical Analysis Using Individual Panel Data," Working Papers 104-24, Department of Economics, Colgate University.

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